Biden weighs options after “disappointing” cut in OPEC oil production | International

US President Joe Biden steps off Air Force One for a visit to New York on Thursday.TOM BRENNER (REUTERS)

Consternation. Anger. Concern. The decision of the Organization of Petroleum Exporting Countries (OPEC) to cut its oil production has fallen like a jug of cold water in the White House, where the president, Joe Biden, speaks of “disappointment” and weighs alternatives. The measure is disastrous for the US Democratic Administration: internally, it opens the possibility of a new escalation in fuel prices just six weeks before key legislative elections. Geopolitically, it blocks his attempts to undercut Russia’s income as an energy supplier. And it once again demonstrates the weakness of relations between the US and its ally Saudi Arabia.

The White House had exerted maximum pressure in recent days to try to persuade Riyadh not to join the rest of OPEC+ in supporting a cut, and instead choose to expand production. That same goal had figured prominently in Biden’s criticized visit to Saudi Arabia this summer, when the US president gave Prince Mohammed bin Salman a fist bump and tiptoed over the 2018 murder of Saudi journalist Jamal Khashoggi. suffocated and quartered in the Saudi Embassy in Turkey on the orders of the prime minister, according to the CIA.

Neither courtship nor pressure was successful. Saudi Arabia voted this Wednesday at the meeting in Vienna in favor of cutting two million barrels in world daily production, approximately 2% of the total (although some countries were already producing below the agreed quotas). It was a slap in the face of the United States. Or so the White House has interpreted it.

“We are examining what alternatives we may have. There are many alternatives. We haven’t made a decision yet,” Biden told reporters on Thursday as he left for a visit to New York. But he also acknowledged that OPEC’s decision represents “a disappointment.”

The White House spokeswoman, Karin Jean-Pierre, had been even more blunt shortly before: “It is clear that OPEC is aligning itself with Russia with [estos] announcements”, he had underlined the same Wednesday.

The step taken by the oil cartel has not been a complete surprise. Russia, whose economy depends on its energy sales abroad, desperately needs to keep prices high to continue financing its invasion of Ukraine. Also Iran, a close ally of Moscow and which is experiencing the biggest protests against the regime in the last three years on its soil. And the exporting countries were watching with concern the gradual decline in prices, from the peak of 120 dollars per barrel, which they reached this summer, to momentarily losing the barrier of 80 dollars in September. That barrier is important because nations like Saudi Arabia consider it the minimum they need to keep their budgets balanced and guarantee social stability in their territories.

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But the US government waited until the last moment for Saudi Arabia, its old ally, to side with Washington once again. Biden’s visit, the White House considered, had been designed to relaunch a very damaged relationship under the mandate of Prince Mohamed Bin Salmán and, above all, since the gruesome murder of Khashoggi, which he was writing for Washington Post. And, they thought, it had been achieved. After the fist-waving scene, Riyadh had agreed to expand its production by 750,000 barrels a day.

The United States, for its part, had agreed to a new batch of weapons for the protection of the kingdom. But the promised departure to Riyadh has never materialized, delayed by the constant flow of equipment from the Pentagon to Ukraine. And the increase in Saudi oil production, sustained in July and August, has been deflating since then.

The failure of pressure from Washington raises questions about its ability to influence abroad at a time when the country is mired in a plethora of internal problems and Beijing and Moscow are actively proposing a new world order. It also raises doubts about the trajectory of relations between Washington and Riyadh, years ago nail and flesh, but increasingly distant. During the presidential election campaign, Biden called Saudi Arabia a “pariah.” Now the Saudi leader winks at a China eager to get as many energy suppliers as possible. And even Russia, the White House fears.

“The president is very disappointed by OPEC’s short-sighted decision to cut its production quotas while the global economy has to manage the constant negative impact of the invasion of Ukraine by President Vladimir Putin’s Russia,” the advisers pointed out. National Security and Economy of the White House, Jake Sullivan and Brian Deere, respectively. “We will consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices.”

The cut in oil production also has an internal effect for the US government. Prices have already started to rise in the west of the country. In just 24 hours, the average cost of a gallon (the most common unit in the US for the purchase of gasoline) had become more expensive by four cents compared to 3.83 dollars (a similar amount of euros at the current exchange rate) of the Wednesday.

It is a bad perspective for the Biden Administration 33 days before the legislative elections, in which the Republicans aspire to take the majority in the Senate and in the House of Representatives from the Democrats. Precisely encouraged, among other things, by the drop in gasoline, the US government had climbed points in the popularity polls. This week, the polls awarded the president an acceptance of 44%, compared to 36% that he came to register this summer.

To deal with possible increases, the Government indicated on Wednesday that it will continue the sale of oil from its strategic reserve “to the extent necessary to protect US consumers and to promote energy security”, 24 hours after assuring that he was not looking at it.

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